The grace period permitted to preserve old property interests under the Marketable Record Title Act, 1945 PA 200 (“MRTA”), is quickly coming to an end and is set to expire on March 29, 2024. MRTA allows a person to hold marketable title to real property subject only to those interests that appear in the chain of title looking back over a 40-year period. In 2018, the Michigan Legislature amended MRTA to require that a specific reference to the recording location of that interest be recited in the chain of title for that interest to be preserved.
The original purpose behind MRTA is to simplify the purchase of property. Typically, when property is purchased, a chain of title search is conducted to ensure that the seller has the ability to transfer marketable ownership to a buyer and to identify other interests that may exist in the property being conveyed. Before MRTA was enacted, the chain of title search would have to include the present-day owner all the way back to the property’s very first owner, a burdensome and time consuming process.
To make the purchase of property more efficient, MRTA created a rule that only required the chain of title review to span a 40-year period. This meant that a property interest needed to be reflected in the 40-year chain of title or else it was deemed extinguished. Before the 2018 amendments, this approach was understood not to affect older easements, use restrictions, or restrictive covenants when there was a reference in the chain of title that the conveyance was “subject to easements and restrictions of record.” However, after the 2018 MRTA amendments were adopted, this general language was determined to be no longer sufficient to preserve such property interests. Instead, a claim must now be renewed by having that interest appear by a specific recording reference at least once every 40 years (ie. by Liber and Page or the document instrument number), subject to certain exceptions such as that interest being physically observable.
For property interests that are more than 40 years old, MRTA allows them to be preserved by filing a notice of claim by March 29, 2024. MCL 565.105 details the specific information that must be included in the notice:
- The claimant’s name.
- The claimant’s mailing address.
- The interest claimed to be preserved.
- The Liber and Page or other unique identification number of the instrument creating the interest to be preserved.
- The legal description of the real property affected by the claimed interest.
- The claimant’s signature.
- A notary acknowledgement.
- The drafter’s name and address.
- An address to which the document can be returned.
Knowing whether you have an interest such as an easement, use restriction, or restrictive covenant that has not been recorded in the 40-year chain of title, or that falls within one of MRTA’s limited exceptions, can be difficult. Common interests that may be impacted include access easements not yet developed, building size minimums, prohibitions on fences, limitations on outbuildings, and residential use restrictions. If you rely on the benefits of one of these interests, it is critical to determine whether any action is needed to preserve that interest prior to March 29, 2024. This analysis will be especially important to homeowner associations, those with building and use restrictions in platted subdivisions, and any person benefiting from a property interest that may not have been specifically referenced in their 40 year chain of title.
If you have questions about or would like an analysis of how the 2018 amendments to the Marketable Record Title Act applies to your property interest, please contact Abby H. Cooper at abby@crlaw.biz or any of the attorneys at Cooper & Riesterer, PLC, for assistance.
